* Holiday 2021: A Pending Disaster? *
Product shortages are getting worse, not better, and the impact on 2021 holiday sales could be unimaginably bad
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Will Product Shortages Doom Holiday Sales This Year?
“Deloitte is forecasting a 7% to 9% increase in 2021 holiday sales compared with the same period in 2020.”
"Retail sales post a surprise gain in August despite fears that escalating Covid cases and supply chain issues would hold back consumers. Sales increased 0.7% for the month against the Dow Jones estimate of a decline of 0.8%.”
So all is good in the world of retail, correct? Unfortunately, I don’t think so. The ongoing, and apparently worsening product shortages are creating a huge risk of lost sales for retailers of all sizes this coming holiday season.
I am not alone in this opinion.
Analysts say they expect widespread shortages, less selection and higher prices for a number of popular holiday gifts, including gaming consoles, TVs, toys and sneakers.
“Covid has turned supply chains on their head,” said Neel Jones Shah, global head of airfreight for Flexport, a logistics technology company. “We’re seeing an astronomical rise in shipping rates, a dramatic lengthening of transit times and a logjam of cargo at every port. Shippers are scrambling to figure out how to get their goods to market in time for the Christmas selling season.”
“I’ve got at least 200 shipping containers worth of plastic storage boxes just sitting in a warehouse, but I can’t get the shipping containers to put them in. The prices used to be low, but now a shipping container costs me $20,000. And the wait for a container is two or three months.” says Duan Li, factory owner, China.
As an added feature of our Premium Issues, every once and a while I will include a key lesson learned (sometimes the hard way) at some point in my 30-year retail / CPG career.
Once You Lose a Sale, You Can Never Get It Back: As a store manager at Kay-Bee Toys, way back in 1980, I was pretty full of myself. I was leading the 2nd highest volume store in a chain of over 500 locations, and our sales were increasing year-over-year by double-digits. One day, Kay-Bee’s VP of Operations was making a visit to the Chicago area, and my store was on his itinerary. The store looked great (my humble opinion) and I expected an easy and positive visit.
Retail News You Can Use:
August Retail Sales Rise Despite 'Trifecta of Macroeconomic Headwinds'
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Quotes of the Week:
“In the middle of every difficulty lies opportunity.” – Albert Einstein
“The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will.” – Vince Lombardi
"Do not let what you cannot do interfere with what you can do." – John R. Wooden